BHP planning potential buyout offer for Anglo American, says source By Reuters

(Reuters) -Global mining giant BHP Group (NYSE:) has approached British multinational mining company Anglo American (JO:) about a potential acquisition, according to a person with knowledge of the matter.

Talks are at an early stage and there has been no formal offer made, the source said on Thursday.

The British mining firm had a market capitalisation of $36.71 billion as of Wednesday’s close, according to LSEG data.

BHP declined to comment. Anglo American did not immediately respond to a Reuters request for comment.

Bloomberg News previously reported on the preliminary negotiations.

The global mining sector has seen a recent slew of merger and acquisitions despite rising concerns around the economic outlook of one of the world’s largest metals buyer, China.

Both the mining firms have recently identified potash as an important business which would complement their mining operations as food demand grows.

BHP is currently focusing on its Jansen potash project in the Canadian province of Saskatchewan whereas Anglo American has its hopes on the Woodsmith potash mine in Yorkshire.

($1 = 1.5401 Australian dollars)